Durbin: Students should be allowed to refinance student loans

College students should be able to refinance their student loans just like they refinance mortgages or car loans, according to U.S. Sen. Dick Durbin and Democratic Congressional candidate Ann Callis.

The two Democrats spoke Thursday on the quad at Southern Illinois University Edwardsville to support upcoming legislation that would allow students to refinance their student loans in order to lower the interest rates.

"It's a challenge for anyone who doesn't have a full ride or a family that can afford to pay for everything to afford college," Durbin said. "Who in the world wants to argue for higher interest rates on student loans?"

Callis, former chief judge of Madison County Circuit Court, is challenging U.S. Rep. Rodney Davis for the 13th Congressional District.

The bill, introduced by Durbin and U.S. Sen. Elizabeth Warren, is co-sponsored by at least 21 other senators, all Democrats. Previous bills also included measures like the right to know what company services their loans and cancellation of the debt if the student dies or becomes disabled.

Durbin said student loan debt now outpaces credit card debt at $1.2 trillion, but unlike other forms of debt, it cannot be discharged in bankruptcy.

"Student debt needs to be manageable, and the terms need to be fair," Durbin said.

Callis told the story of a public defender she once met who made so little in public service that her loan payments were deferred. Once she approached retirement, however, she faced nearly $250,000 in debt.

SIUE student Jodi Cox of Marine said she was lucky enough to receive the state's Monetary Assistance Program grant as an undergrad, but now she is reliant on student loans to finish her master's degree in public administration while her partner is deployed overseas.

"I try not to think about how I'm going to pay back $35,000 in loans," she said. "I'm fortunate to be able to continue my education, but it puts additional stress on us."

Callis said the overall issue of college affordability will need other solutions as well. "We can try to look at expanding Pell grants, or loan forgiveness for periods of public service," Callis said. "But this is a good start."

Andrew Flach, spokesman for Davis' campaign, said they have not studied the merits of the refinancing bill, as it has not passed the Senate yet. On student loans in general, he said Davis supported the move to make student loan interest rates market-based rather than set by Congress, and to enhance financial counseling for students.

We feel that by requiring students to consent each year to the amount they owe, we can help them make better decisions and prevent over-borrowing," Flach said.

Much of Callis' speech on the SIUE quad was drowned out by a handful of protesters who shouted "Clueless Callis!" over her. Both Callis and Durbin said they recognized the protesters' First Amendment right to speak. "I would have expected a little courtesy," Durbin said. Callis said it was the first time this kind of counter-protest had happened.

Flach said the Davis campaign did not authorize the protests or disruption of Callis' speech.